Jefferies shares have swooned today as one of the last remaining true broker dealers released Q3 results which missed massively on both the top and the bottom line. And if these are an indication of what most of Wall Street has to look forward to, Q3 will be a bloodbath for banks. As Barron's Tiernan Ray reports, citing CEO Dick Handler (talk about mean parents) that "trading volumes across the board were painfully slow during the months
of June, July and August,” said CEO Richard Handler — quite a contrast
from Q2’s results, when Handler said the firm was “pleased with solid
quarterly results.” Putting this number in context (from the 8-K), Q3 net revenues were $520 million, versus $700 million last year, a whopping 25% decline primarily as a result in the complete collapse in principal trading revenues to $74.3MM from $338,6MM, an 80% decline in this main profit center for Wall Street firms, which have recently all become nothing but glorified hedge funds.

We will get you the conference call transcript as soon as it is availble as Dick traditionally tends to give an unvarnished look at the industry.

Comment viewing options

While I sort of feel sorry for firms with some measure of integrity, the fact is that corruption has destroyed capital markets. No one with any measure of authority has acknowledged this. Therefore, the simplest and most urgent financial advice is simple: Get Out.

HFT would really be much more efficient based in India or China....we didn't need a financial sector here anyway, did we? Is the stench of irony choking anyone else?

Here is the Future: Central banks and their national pension subsidiaries renting gamer kidz to gun HFT algos in Madras and Shanghai. That will be the sum total of the market. Oh, and zombie bank subsidiaries of the central banks, like GS and JPM and WFT. They will pretend to be cool but actually be state bureaucratz. They already are....

Sing it with me together now folks, this one is dedicated to corrupt/swindling securities dealers, FINRA, hedge funds, and derivatives traders "And my heart cries for you!!!" Main street revenge "bitchez!!"

W/out an industrial or manufacturing base what need is there for financial services? The credit bubble became so big it consumed everything and left the shell , now the banks are wondering what happened.

Sprott is correct this is the end game of the Keynes monetarists, (RIP) , An economy based on consumerism/debt flawed from the get go.

Hmmmm, I think of it this way. The stock market is like a giant game of Texas Hold'em poker. The game continues as long as players bring money to the table. This game is and has been rigged for years. The small players were robbed of their money. They are cashing out. No one left to take money from, i.e. retail investors. You made your own bed, now lie in it!

It's been a long time coming. The day of reckoning on Wall Street is finally here.

Without bailouts courtesy of you and me the downsizing and layoffs would have happened 2 years ago. Now we're actually worse off since lots of the bailout money disappeared into deep pockets in the form of pay for "outstanding performance", but firms and capital markets are still a smoking ruin.

This is not the kind of cyclic fat trimming we've seen after booms. This is a secular downsizing of an overbloated sector.

In a debt based system when it reaches it max saturation level Economy becomes a hollowed out log lying in the woods.. the rot happens from the inside. Now they are wondering what happened to the wonderful Tree that once stood.

massive pay cuts have been on the "cum" for a long time now and well reported by the WSJ. again: "this is devastating to state and local governments" and of course New York City in particular. We shall see who replaces Summers but to not call his resignation a huge deal is to "minsunderestimate" the way regimes (especially in DC) actually function. The "big-ness" can be measured in that it's being reported at all as slowly but inexorably the media protections granted this Democratic onion keep getting peeled away.